New Mexico legislators are conferring with energy experts about plunging oil prices as they craft a new state budget.
The price of U.S. crude sank almost seven percent to below $27 a barrel Wednesday amid a glut in oil supplies.
New Mexico may put plans for $77 million in salary increases on hold because of falling revenues from taxes and royalties linked to oil production. The salaries represent about one-third of new spending under a $6.5 billion state budget recommendation from Republican Gov. Susana Martinez.
New Mexico's sales-type taxes also are lagging despite cheap retail gasoline prices that ordinarily boost other economic activity.
Low fossil fuel prices are squeezing budgets in several states that rely heavily on severance taxes such as Alaska, Texas, North Dakota, Wyoming, Oklahoma, and West Virginia.
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